Sir George speaks out on Care Homes crisis
8 Jul 2002
Sir George spoke in the House of Commons in a debate launched by the opposition on the Crisis in Care Homes

Sir George Young (North-West Hampshire): The House was interested to hear the hon. Member for Crawley (Laura Moffatt) talk about the partnership approach that she helped to promote in her constituency. I am sure that the same is true in many other constituencies. However, I disagree with what she said about my hon. Friend the Member for West Chelmsford (Mr. Burns). He made a fine and impassioned speech, and I hope that it is placed in residents' lounges in care homes around the country.
One of the claims made by this Administration was that they would introduce joined-up government, but this area of policy is marked by serious discontinuity. We were told that the comprehensive spending review would introduce stable, generous and confident financial regimes for public sector services, but this area is riddled with one-off payments to meet continuing crises, with no sustainable solution in sight.

We have been told that the way forward is partnership, but the Government have proposed entitling one partner to fine the other, although not the other way round, and have passed a Bill enabling one partner, the NHS, to take over the other partner, social services, at the whim of the Secretary of State. We have seen substantial and welcome increases in the budget of one partner, the NHS, at the same time as we have seen unsustainable settlements for the other, social services departments.

The point where the two systems meet now has a name of its own: DTC—delayed transfer of care, which is an epitaph to policy failure. I want to speak from three perspectives—that of the NHS, social services and care home owners—and then outline a way forward.

First, on the NHS, cash for change has not solved the bed-blocking problem. I shall quote from the minutes of the North Hampshire Hospitals trust of 11 June:

"There are now 60 Delayed Transfer of Care patients that are also causing pressure on staff. The number of long term delayed transfer of care patients was a cause for concern."

Those minutes concerned Basingstoke hospital, where bed blocking is still an issue. I asked the other major hospital that serves my area, which is run by the Winchester and Eastleigh Healthcare trust, about its experience. Its bed-blocking figures are down from last winter, but at the same level as a year ago, totalling 59. If one looks at the reasons why, one sees that the problem is not going away.
Last year, at the worst, there were 25 cases of bed blocking owing to lack of funding. That number has now gone down to one. However, there are now 17 bed blockers due to there being no vacancy in a nursing home, as against one a year ago. On top of those 18, there are three bed blockers because of no vacancies in residential homes. Thirteen are still looking for suitable placements and 12 self-funders either have no vacancies or are looking for suitable placements.

Cash for change will not solve that strategic problem of undercapacity. A series of one-off payments simply builds up problems for the future. In Southampton, for example, the top-ups that the city paid for discharges from acute beds in 2001–02 out of cash for change produced an ongoing financial commitment into 2002–03, which means that there are no top-ups in the current year. So one blockage—shortage of cash—has been partially and temporarily cleared, but the logjam has simply moved to the next bend in the river: shortage of beds.

That brings me to social services. Hampshire county council has a competent, caring department that is struggling to do its best with the resources available, but it is caught between the rock of the revenue support grant and the market realities of care home provision. I asked Hampshire county council how its expenditure on social services compared with its standard spending assessment.

In 1988–89, it spent £1 million under its SSA. The next year, it spent £5.1 million over its SSA, and that has gone up ever since until this year, when the budget is £11 million over the SSA.
I know that SSAs are simply a means of distributing grant, but if a council overspends on social services, it must either underspend on education or put up the rates faster than the Government would like. If the Government were open about the matter, they would recognise that they are increasingly vulnerable to the accusation of the Joseph Rowntree Foundation and others that they have got that part of the settlement seriously wrong.

Of course we must develop intermediate care services in order to try to divert demand, and Hampshire county council is doing that. However, that is unlikely to be wholly effective, especially when one takes into account the most dependent and vulnerable older people who need nursing care. The demography time bomb is ticking away; the population of over-65s will increase by 3 per cent. by 2007, and the over-85s by 6 per cent. The demand for nursing home places continues to rise. Over the past three years, the number of publicly supported nursing placements has risen by 9 per cent.

While demand increases, supply is falling. All the underfunding has affected the market. Between April 2001 and March 2002, 252 residential beds and 103 nursing beds net were lost to closures. In the previous year, the numbers lost were 89 and 75 respectively, so the losses are accelerating. Specifically in relation to nursing homes, there has been a reduction of 400 beds over the past three years—about 10 per cent. of total capacity.

That leads me to my final ingredient: care home owners. They feel isolated and vulnerable. That wholly understandable emotion feeds through to their staff—who read the papers and listen to the radio—and of course to the residents and their relatives. There is now a crying need for stability and confidence, to which I shall return in a moment.

I received an e-mail on Saturday from my constituent Mr. Chalmers, who lives in Tadley. He said:

"What is causing care homes for the elderly to keep closing at the rate they are at the moment? . . . My elderly aunt aged 95 is now being forced to look for another home (3 in 2 years) as they keep closing and being sold off."

Like other Members, during the election I visited most of the care homes in the constituency and, in preparation for this debate, I returned to one, a well-run, 21-bed home with an owner-manager. To get to the bottom of the figures, I asked her what the costs were. Allowing for no return on capital at all, and allowing the owner-manager £35,000 as salary, the weekly costs are £348 per resident—£273 is paid by Hampshire county council for the residents whom it sponsors, with self-funders paying £375. That is an indefensible cross-subsidy. I have no objection to residents on low incomes who are sponsored by social services being subsidised, but they should be subsidised explicitly from the public purse, not by their fellow residents and their families.
The basic wages in the home are £4.50 an hour, with more for qualified staff. The owner would like to pay more, but she cannot. It is difficult to retain staff, given the buoyant labour market in North-West Hampshire. The owner is grappling with extra costs, such as those incurred by complying with new regulations on radiator covers. There are 42 radiators in the home, and she has had quotes of up to £10,500 to cover them. I am sure she will do so, but in the meantime she has had to build a new cupboard and buy more ringbinders to store the growing amount of paper she has to keep—circulars, regulations, staff assessments, residents' assessments and so on. I am sure that other Members have found that some owners are beginning to resent the growing number of better-paid people who check, supervise and monitor them and tell them how to run their business.

Mr. Swire: Has the person in my right hon. Friend's constituency suffered from the same problem as a care home owner in Exmouth, who contacted me to say that he and his wife, who own the home, and their daughter, the matron, have had a letter from the National Care Standards Commission, inviting them to apply to the Criminal Records Bureau for enhanced clearance. They have been given until 1 August to comply, otherwise they will have to close down, but they have been unable to get through to the bureau.

Sir George Young: We must have sensitive and sympathetic application of the regulations if good people are to stay in the market. In Hampshire, there are homes that have to remove en suite bathrooms to meet the space requirements, which cannot be right.

The argument that the crisis is less of a crisis because implementation of some regulations has been deferred sounds plausible, but is invalid if we want to achieve a confident care home market. For those who are not going to meet the standards for whatever reason, it simply postpones the day of reckoning and ultimate closure. Those who would like to stay want to know that staying in the market will be worth while and that fees will rise, as the hon. Member for Sutton and Cheam (Mr. Burstow) said.

Many owners need funding to invest, but the banks read the newspapers and are growing more cautious. An inadequate revenue flow will not permit home owners to borrow the necessary capital to fund changes. Earlier this year, at the behest of the Department, the personal social services research unit carried out research into the reasons for closures. It concluded that a number of factors were at work, but describe two as being "decisive" in the owners' decision to close—low prices and the belief that they would not increase sufficiently.

To sum up, there is a clear picture of continued increases in demand led by demography, coupled with a reduction in supply. Costs are rising and are likely to go on rising, driven by higher standards and better treatment of staff and residents. Insufficient funds, however, are being made available to meet market prices. The gap is far wider than the Government seem to recognise. The system survives by low returns on capital; indefensible cross-subsidy; underpaying of staff; moral pressure on families to top up funding; bed blocking; and delays in assessment.

Although the Government pay lip service to the need for a healthy and well-run care sector, they have not done enough to secure it. They should make crystal clear what they expect from the sector in the long term and clarify the role of residential and nursing home care in the overall scheme of community care. They should make it clear that they want good people to stay in the sector and that they want more good people to invest in it. They should work out the likely level of demand, and then, in discussion with local authorities and the industry, put a price on what that is going to cost. That should then be factored into the SSA so that the resources are made available. In the meantime, the Government should abandon their policy of taking social services departments into the NHS. They are not running the NHS efficiently, and I do not believe that they would do it any better if they took on extra responsibilities for community care.
It is legitimate to ask where the money should come from. I would shave it off some of the growth money aimed at the NHS. We simply cannot limp on as we are. That is not fair on owners, residents or staff, so I urge the Government to recognise the scale of the problem that confronts them and to come up with an effective response.
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Copyright Sir George Young Bt. 2015